Michael Creed's Blog

At or before closing, your lender must inform you of any plans to turn over the rights to administer your loan to a mortgage servicer, as often happens when a mortgage is sold. The new servicer could be another lender, a bank, an investor or a third-party processing company that specializes in servicing mortgages. Over the term of your loan, you may have several mortgage servicers.

Duties of a Mortgage Servicer

• Collect and process your monthly mortgage payments.

• Forward your payments to the investor who owns your loan (if other than the servicer).  The servicer acts on the investor's behalf, should problems arise with the loan.

• Pay your property tax and homeowners insurance from your escrow account.

• Send you an annual mortgage statement that details which portions of your mortgage payments were applied to principal, interest, taxes and insurance along with any adjustments in payments to cover taxes and insurance for the coming year.

• Counsel and assist you to overcome delinquencies if you miss loan payments. For instance, a forbearance, or deferral of principal and interest payments, may be extended to help you out of financial difficulties. If the loan becomes seriously in default, foreclosure might be necessary to protect the investor's interest in the property and salvage the borrower's equity, if any.

Rules that Apply to a Change in Mortgage Servicer

• The new servicer must honor the terms and conditions of your original mortgage agreement.

• You must be notified in writing of the change by both your original servicer and the new one, noting the date of transfer and contact information of the new servicer.

• During the transfer, you have a 60-day grace period during which you cannot be charged a late fee if you mistakenly send a mortgage payment to your old servicer.

• If there was to be an issue with a new servicer, be sure to put any questions or disputes you have with the new servicer in writing and continue to make payments while you settle the dispute.

• Federal law requires the servicer to investigate your disputes and make any necessary corrections within 60 business days.

With energy costs on everyone's mind this time of year, here are ten investments that can yield big payoffs on your home energy and tax bills! 

1. Sealing & Insulating Heating/Cooling Ducts. Especially ducts that run through unheated areas of your home such as attics, crawlspaces, etc; you could be wasting up to 30% of your heating and cooling dollars in this area. Use foil-faced tape to seal crimped-metal joints between duct sections. (NOTE: despite it's name, duct tape really isn't suitable for this purpose because it dries up over time.)
2. Weather-Stripping (or Upgrading) Windows and Doors. Repairing leaks - obvious or not - is very easy to do and will always get you a big savings.
3. Adding Attic Insulation. If your attic has exposed floor joists and you're able to see them, you need more insulation - a minimum of 12-15 inches to achieve an R-38 rating.
4. Upgrading Your Furnace and Air Conditioner. If your furnace is more than 15 years old (or your central-air unit is more than 10), upgrading to an Energy Star-qualified model could reduce your heating costs by 15% and your cooling costs by 20%. Regardless of the efficiency of your equipment, make sure it's serviced regularly to stay in peak operating condition.
5. Buying Energy-Efficient Appliances. Refrigerators especially can be energy hogs, but designs continue to improve.  Today's Energy Star-qualified models could save as much as 50% of the energy consumed by a refrigerator that is little over ten years old.  If you're not ready to replace an aging refrigerator, check the seal to make sure it's still tight.  If you close the door on a dollar bill and can easily pull it out, it's time to replace the seal.
6. Insulating Your Water Heater and Hot Water Pipes. The Department of Energy reports that water heaters can account for up to 25% of a home's energy use. Installing a tank jacket and insulating hot water pipes may let you lower your heater's temperature by 10 degrees and still get hot water from the tap sooner than you did before.
7. Replacing Incandescent Bulbs with Fluorescents. The cost of compact Fluorescent bulbs continue to decline, but they still outlast the incandescent bulbs 10-to-1 and the energy consumption is a fraction of that used by incandescent bulbs. Because fluorescents can take time to achieve full illumination, they're best for high-use areas of the house where you would leave the light on for more than five minutes.
8. Installing a Programmable Thermostat. Depending on your home routine, it has the potential to shave $100-$150 a year off your utility bills, easily paying for itself in several months.
9. Adding Ventilation. It's good to use exhaust fans in the kitchen and bath but they may not do their job properly once you have tightened up your home because there is no "makeup air" to restore the balance. The simple solution: have a contractor install a duct that brings fresh air into the air return on your furnace.
10. Landscaping to Save Energy. Plant shrubs and deciduous trees on the south side of your home for summer shade, if possible, but take care that plantings don't obstruct the airflow of your central-air unit.

Finally, to find out what is on your home's top-ten list, you should consider contacting your utility company as they typically provide free or low-cost energy audits that will tell you exactly where you are losing the most money. I did this a few months back for my own home and I couldn't believe how much money I was wasting each month!

Loan Trigger Leads Can Be Very Annoying-

Have you ever applied for a mortgage and then shortly thereafter found yourself wondering how in the world so many people got your phone number?

This happens regardless of whether you inquire through an online source like LendingTree.com, LowerMyBills.com, GetSmart.com, or your local bank because of a little known, yet widely written about, mortgage marketing tactic called "Loan Trigger Leads."

What is a Loan Trigger Lead?

After you submit a loan request, the first thing that many lenders will do - some online companies will do this before they even talk to you - is pull a credit report that includes information from the three major credit bureaus Experian®, TransUnion®, and Equifax®. This request for a credit report will then "trigger" an alert to these credit bureaus that the borrower whose credit they are checking is in the market for a loan.  These alerts are then packaged along with the applicant's private information (contact data, select loan criterion and credit score range) and sold to other lenders, typically those that are far less established/reputable than the lenders that actually pulled the credit to begin with. I imply that the buyers of the trigger leads are "lower quality lenders" because there is no criteria other than money required to get those leads.  Many other sources, such as those websites listed above, require the lender to be approved and to agree to strict standards before they can purchase your inquiry from the application supplier.  Yahoo! Finance does a great job of explaining the entire trigger lead system in detail.

There are Two Ways of Looking at This-

Competition is good! You are correct, competition is good. In fact, it's great!  The problem is that there is too much competition and many borrowers simply get tired of the phone calls and they drop the subject of getting a mortgage altogether.  Think about this; you apply online and your legitimate loan request made through, say, LendingTree.com, is sold to five lenders as most of LendingTree.com's applications are.  Beyond that, three of those five lenders that bought your loan request pull your credit through each of the three credit bureaus.  You now have 14 different lenders/brokers calling you (the original five, plus the nine trigger leads that were generated when three of the lenders pulled your credit from the three bureaus) YIKES, it's time for a new phone number!!

Hey, what happened to my privacy? This argument is fairly self-explanatory; your information is being sold, without your consent, to anyone and it is completely legal, per the FTC,  unless you chose to opt out several days before you applied for the mortgage.

How You Can Opt Out-

You can either visit optoutprescreen.com or call 1-888-567-8688.  Your request is to be processed within five days but it may take up to 60 days before all prescreened offers stop; if you choose the electronic option, you are only opted out for five years and if you choose the permanent opt out by mail option, you can print a form, sign it and mail it in for a permanent status.  You can also protect yourself from prescreened calls (not calls from the original source of your application) by putting yourself on the National Do Not Call Registry  (donotcall.gov or 1-888-382-1222)

Already Applied; Didn't Opt Out Ahead of Time-

Ask the following questions of the callers as they call you:

• Where did you get my information? If it's not a source you recognize as being the source of your inquiry, go on...
• Do you have my Social Security Number? If so, what is it?  If you provided your Social Security Number when you applied for the mortgage but the caller doesn't have it available to recite, you can be 99% sure that you are dealing with a trigger-lead-buying-company because it is against the law for the credit bureaus to sell your Social Security Number.
• Who gave you permission to call me?
• Why should I be willing to speak with you when you weren't referred to me by someone I trust?
• How are your mortgage rates determined and what impacts the rate you say you can get me today?
• What are all of your closing costs and the closing costs of all third parties? (Lender, title, state taxes and pre-paid escrow items)

Additional Resources

• Trigger Leads: Don't Be Exploited by the Credit Bureaus

• Loan Trigger Leads: How to Avoid Unwanted Calls

• What Realty Agents Need to Know about Trigger Leads

• Applying For a Mortgage Makes Credit Agencies Money

• FTC Says It Can't Protect Mortgage-Seekers From 'Trigger Lists'